One of the responses to that tweet stated that they are allowed to share their earnings to reporters early with a non-disclosure agreement[0]

[0] https://twitter.com/campuscodi/status/1186768962362568704

What could go wrong with that pracfice?

Some hackers could break in and steal the press releases and make $100M selling them to stock traders. In fact they hacked Business Wire, which was in charge of Snap's earnings release today.

https://www.theverge.com/2018/8/22/17716622/sec-business-wir...

https://www.businesswire.com/news/home/20191022006082/en/

Let's say hackers get info that Snap is about to miss earnings. They sell the info to someone who has the money to trade, that person shorts snap, makes a tonne of money but obviously moves the market. The SEC go "Hmmm... why did snap tick down before the earnings were reported, let's go arrest the guys who made that trade".

1. SNAP is a fairly liquid stock so even shorting a lot won’t move the market very much.

2. It is the day of earnings and typically there is more volume than usual that day, especially in the last hour.

3. Lots of people make (and lose) money the day of earnings. Are you going to arrest everyone who made the right large bet on a stock before earnings? If so that prison is going to very full

We have recent evidence that they're not very good at doing that anymore. Just look at Equifax and Intel, or the recent stories about how people are most likely playing the entire market based on advanced notice on what Donald Trump's tweets are going to do to the market.

Sadly- we can’t disclose.

Publishing of news, the same as the newswires that report earnings. The numbers don't come straight from the company but are usually scheduled on various services for the reporting time.

There are plenty of people involved in handling sensitive news of all kinds. It's not really a problem. The risk of insider trading is rather low because it's easy to catch and has harsh penalties.

Make a deal with a reporter for early info in exchange for favourable coverage?

For coverage, period. It surely isn’t obligated to be positive and Snap isn’t seeing it before publication. Though presumably they wouldn’t share numbers they knew were bad.

Maybe but it's also just a way to get coverage closer to the actual announcement by letting the reporter write their story ahead of time instead of having to rush to get it done.

But that would be insider trading right?

Is it insider trading is if you don’t do anything with the information?

No. Newswire services receive these kind of press releases in advance all the time.

As long as you don't use or share them, you're fine.

No, it’s not. Someone must make a trade based on non-public info for there to be insider trading.

Alright, then I guess I’ll get into reporting, develop relationships with public companies, get some of these numbers and maybe spill them very carefully to who knows who? There’s always telegram or other for me to share it carefully. No one can find out.

Just like anything other crime, if you do it enough to make serious money they'll dedicate resources to going after it. It's the difference between being a dealer and a kingpin and there's not much money to be made being a dealer.

Also, odds are the SEC is punching the names of anyone who makes it big day trading into some NSA type database and if they know anyone who would have had the information that link will be followed up on.

Yes, the SEC definitely follows up on this, or so I've been told. They're not idiots, and this kind of financial crime is basically super-low-hanging fruit for them (probably because many people make the mistake of assuming they are idiots).

> Yes, the SEC definitely follows up on this

Yes, and they're quite adept at it even if you don't think you're leaving a trace. For example: https://www.sec.gov/news/press-release/2014-55

Interesting how the middleman got off without punishment. Shows how narrow insider trading can get, which speaks the the programmer tendency to assume law is code. Rather law is interpreted and in this case only two of the three parties fell under the SEC enforcement. That neither is going to jail is also notable, SEC can take money and burn a career but stealing from the market is lots safer than selling drugs.

Well, for insider trading, it isn't prohibited by law. It's entirely precedent.

That account sounds like at least one of the 3 provided a detailed description of what happened. The SEC weren't listening into the initial conversations they had - presumably they got wind of the trading and then managed to get enough leverage on one of them to make them talk. If they didn't talk, I wonder what level of evidence the SEC would have.

I got a call from them after a cousin I’ve never met traded the stock of the company I was working at. Anybody who works at a public company sees insider information every day. Anybody who thinks they want to profit of it, especially if they think doing so would be easy, can expect a run in with the SEC.

You make it sound like white collar crime is unprofitable.

Lots of history seems to disagree, with only the occasional person having bad luck.

Presumably the idea is that the reporters can prepare a story on them that's live as soon as the numbers are out - kind of like early screenings of movies for reviewers (who are also sometimes sworn to secrecy!) But seeing how much financial value the information has, maybe it isn't worth the risk.

Sell them, obviously. The fact that we are even talking about this issue reveals that TechCrunch is eager to show off that they know in advance!

It can always be considered as "I got this info from TC, never mind my insider trading"